Obama stuck on repeat: End subsidies for big oil

posted at 2:20 pm on March 17, 2012 by Tina Korbe

For the fourth straight week, energy issues dominated the Democratic and Republican weekly addresses. I wonder why they bother to make new videos: The president and whoever is the Republican-of-the-week say the same thing every time. Just replay the first energy-themed addresses and leave it at that!

As long as the president is going to repeat his call to end subsidies for big oil, though, I’m going to echo it with the call to end all energy subsidies. As I’ve written before, it’s a myth that the tax code favors oil over renewables; in fact, under the Obama administration, renewable energy has been and continues to be more heavily subsidized by tax carve-outs than any other energy sector. We all know how those alternative energy subsidies have worked out for us. It doesn’t matter who the cronies are; crony capitalism is the problem.

The president also implied in his address that high prices right now might be partially the fault of traders “who distort the price of oil, and make big profits for themselves at your expense.” But Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, explains in The Wall Street Journal that “the oil market is [just] reading the front page.” The price reflects what’s going on in the world. Far from a distortion, it’s the one reflection we have of the state of American energy today. Yergin writes:

In 2012, the reason is mainly geopolitics. Last November, the United Nations declared that Iran was clearly developing nuclear-weapons capabilities. The West is responding with sanctions aimed at reducing Iran’s ability to export oil, on which it depends for more than half of its government revenues, to get it to halt its nuclear-weapons program. Tehran has answered by conducting large naval exercises and threatening to close the Strait of Hormuz, through which passes some 35% of the world’s oil exports.

Global oil prices and U.S. gasoline prices have both risen about 20% since mid-December. And all this is occurring in a world oil market that is already tight, tighter than it was last year, with no more than 2.5 million barrels of spare capacity. At least half a million barrels a day are currently out of the market because of disruptions in South Sudan and Yemen and civil war in Syria.

A market this tight would already be susceptible to upward price pressures. But the market is operating on expectations that supplies will become even tighter as new U.S. and European sanctions against Iran take effect and the risk of military conflict increases.

These facts actually work in Obama’s favor; there’s no need for him to invoke traders “who distort the price of oil.” Still, while it might be true that the president isn’t responsible for every factor currently driving up the price of gas, he also can’t hide the evidence of the first three years of his administration. At every turn, he has pursued an energy policy that punishes oil and gas companies and rewards alternative energy companies. Had he taken a different approach from the beginning, we might not be facing the high prices we do today. Yet, in the face of these high prices, all the president proposes is to double down on his already questionable approach. Perhaps he lacks the humility to learn from his past mistakes.

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For once we agree, end em King Hussein and when gas hits $6.00 you will be a footnote in history as the worst SCOAMF POTUS ever!
Do it big guy I double dog dare ya,
is nationalization or price controls next Lyin kING?

When you take standard deductions on your taxes do you think of it as being “subsidized” by the government?
Didn’t think so.
The only energy sectors that actually get subsidies are the “green energy” ones..wind, solar, bio-fuel.

Sure, let’s end all real subsidies for all forms of energy production and research.

Let’s repair the language first, and stop calling decades-long corporate tax deductions a ‘subsidy’. This is the same idiot party that wants us to believe that if they don’t get their higher taxes ‘on the rich’, that means literally that the government is writing them a check.

Let’s go one further and end stupid mandates, like ethanol content, and ‘renewable energy’ (but not including hydro) mandates on electric utilities.

What does that have to do with anything? You insulted Tina, said she wasn’t a thinker, and I slapped you down for it. If you don’t like that, maybe you should be more polite in the future. I don’t think you are bright and I think Tina would blow you out on an IQ test. No perhaps about it. I’d bet 10,000 dollars on it.

This clown is going to run around America all summer making an equivalency between a 4 Billion Dollar Subsidy and his own creation of an entitlement that will cost Trillions and Half or MORE of this country will buy this BS.

Yet, in the face of these high prices, all the president proposes is to double down on his already questionable approach. Perhaps he lacks the humility to learn from his past mistakes.

The problem is that he doesn’t see it as a mistake.His words and actions make very clear that oil is dead to him. He is just too ideologically blind to realize the damage he is doing.Their is only one known cure and that is to kick his azz out.

And if you consider Tina a thinker on the level of Ed, AP, and MM, then you truly are an idiot.

And I’m fairly certain I’m not the only one here who thinks so…I just may be the only one who says so.

ladyingray on March 17, 2012 at 2:49 PM

I think she’s just as bright as Ed, Allah and MM. She is younger, but that has nothing to do with IQ.

The reality is if she uses the word perhaps or not is irrelevant to the point she was making. So why are you jumping all over her for the use of the word perhaps, concluding she’s not a thinker on the basis of one word that doesn’t change the point she is making?

You want to put yourself forth as an intellectual. I don’t think you are.

You claimed you were drunk last night so I forgave you. But you did insult me and when I challenged you on it, you didn’t want to engage. That’s an intellectual cowardice in my view. I’m not talking about general cowardice, I’m sure you are the man in other ways.

I don’t go around randomly insulting people. If you are nice to me, I’m nice to you.

TITLE I SEC. 104. LIMITATION ON PERCENTAGE DEPLETION ALLOWANCE FOR OIL AND GAS WELLS.

(a) In General- Section 613A of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

`(f) Application With Respect to Major Integrated Oil Companies- In the case of any taxable year in which the taxpayer is a MAJOR INTEGRATED OIL COMPANY (as defined in section 167(h)(5)(B)), the allowance for percentage depletion SHALL BE ZERO.’

Also, they do not get tax credits. The oil and gas industry gets the same deductions as do other industries do.

“I’m a supporter of the President’s. I’m concerned that he’s going to lose credibility on this oil and gas issue because HE’S NOT TELLING THE TRUTH entirely. What he is saying is that you need to eliminate four billion dollars worth of tax breaks for major oil companies because major oil companies have obscene profits.

THE PROBLEM WITH THIS IS THAT ONE OF THE BIG TAX BREAKS HE’S CITING – INTANGIBLE DRILLING COSTS – EXCUSE ME – PERCENTAGE DEPLETION – WAS REPEALED BY CONGRESS, EXCUSE ME, IN 1975, 36 YEARS AGO, AS IT AFFECTS MAJOR OIL COMPANIES.”

The only ones that get percentage depletion anymore are domestic independents who drill most of the wells in the United States and employ four million people.”

Democrat Congressman Dan Boren explained and agreed with Frost that Mr. Obama needs to get his facts straight while pointing out that the Obama energy solution would hike the cost of oil production, hike foreign oil dependency, hike the burden on smaller, independent energy producers, and leave Big Oil – among them Exxon, Shell, BP, Phillips and Conoco untouched:

The removal of these provisions would negatively affect domestic independents who utilize them to attract the capital necessary to drill new oil and gas wells inside the United States.

It is estimated that eliminating percentage depletion and IDCs for domestic independents would reduce U.S. drilling by 30-40 percent, thereby increasing the nation’s dependence energy from foreign sources.

About Mr. Obama’s “percentage depletion” solution: Furthermore, the major oil companies are barred by law from receiving percentage depletion altogether, as it only is given to domestic independent producers.

About Mr. Obama’s “intangible drilling costs” solution: The IDC preference is only available for domestic drilling activity, and as the major oil companies drill primarily outside the U.S., the domestic independent sector of the industry will yet again bear the brunt of losing this critical provision.”

You wouldn’t be banned for criticizing another poster if that was the topic of the thread. But it isn’t, so you are in violation of TOS. You said what you wanted to say, so why not move on?

Dee2008 on March 17, 2012 at 3:15 PM

Ok, it’s ok for ladygrey to insult Tina’s intelligence and you don’t see that as banworthy? But I need to go b/c I’m criticizing the person who engaged in ad hominem on a blogger that writes at Hotair and who seems to be a bright young lady?

Well I think my mechanical engineering degree tends to indicate I’m bright. If you want to argue engineers are stupid, go for it. I think that’s a tough sell to most people, and your screenname is “lovingmyUSA”.

Ladyingray was commenting on the article. You were commenting on Ladyingray. See the difference?

So, what do you think about Obama’s harping on ending oil subsidies?

Dee2008 on March 17, 2012 at 3:20 PM

I think you are being smarmy, and defending your little cyberbuddy despite the obvious fact she was being a jerk. I’m not going to talk to you anymore, b/c I expect intellectual honesty. If you are going to defend somebody who is clearly in the wrong while trying to demonize me when I’m in the right, you don’t deserve my respect.

I tend to think it’s a minor detai. And you don’t like the fact that I’ve put you on the spot. :)

Dr. Tesla on March 17, 2012 at 3:16 PM

Hello? I am not on any spot. You are the only one who thinks you have put me on the spot.

Tina is a light weight thinker, her blogs have no meat, and I’m sorry for you that I can express my opinion here. Because it is obvious that your skin is so thin that you can NOT handle the expression of my opinion. Quite, frankly, that means that you are not in Tina’s league, ’cause she can handle it. Thanks for playin’…

What does that have to do with anything? You insulted Tina, said she wasn’t a thinker, and I slapped you down for it. If you don’t like that, maybe you should be more polite in the future. I don’t think you are bright and I think Tina would blow you out on an IQ test. No perhaps about it. I’d bet 10,000 dollars on it.

Dr. Tesla on March 17, 2012 at 2:45 PM

Lord, you didnt absorb much in high school, did you…I bet you think Megan McCain is like..super intelligent…

Thanks for the post. Y’know, I’ve never understood why Obama blames speculators for much of the price run up, but fails to understand if he were to make some major concessions on tapping our fossil fuel deposits here, how that would affect the speculators. Allowing deep drilling in the Gulf, ANWAR exploitation, etc. would certainly affect speculative trading. Unless, of course, he really doesn’t understand how hints involving supply and demand affect he futures markets.

“Speculation” in oil – defined as buying futures contracts with no intention of taking delivery – amounts to less than 1% of the market, too little to affect the price. Either Obama is stupid, or he knows this and is lying about it.

Oil futures are overwhelmingly bought by oil companies to ensure their steady supply or end users (like airlines, FedEx/UPS, trucking companies) as a hedge against price increases. Only as many contracts are sold as can be delivered, so there is just no room for “speculation” – but it makes a convenient boogeyman for the ignorant Obama supporters to hate, so they won’t question his disastrous policies.

Most of the subsidies oil companies get are tax incentives to find and produce oil, or helping them produce the 40-some blends idiotic federal regulations now require. Eliminate the subsidies, and GAS GOES UP.

You have to be completely stupid to support Obama, or even to believe he is a decent human being.

Perhaps you are so desperately afraid the truth might offend someone that you can’t see that it’s not a mistake at all. This is his deliberate strategy to raise the price of fossil fuels. Why? Because he thinks it’s not fair to the rest of the world that America uses a disproportionate amount of fossil fuels.

I’ve never seen so many pseudo-conservatives afraid to be accused of saying Obama does bad things on purpose.

He’s a liar and he needs to be called out on it more frequently. Also, there should be no beating around the bushes, “he’s a nice guy and all, but he’s in over his head, blah, blah, blah” crap either. He will not hesitate to call his opponents liars even when they are not. When he is lying, he should be exposed as a liar in the most clear and stark manner imaginable.

Tina is a light weight thinker, her blogs have no meat, and I’m sorry for you that I can express my opinion here. Because it is obvious that your skin is so thin that you can NOT handle the expression of my opinion. Quite, frankly, that means that you are not in Tina’s league, ’cause she can handle it. Thanks for playin’…

ladyingray on March 17, 2012 at 3:24 PM

Light-weight thinker might be the problem. Just being a light-weight is probably closer to the truth. No courage.

Tina is a light weight thinker, her blogs have no meat, and I’m sorry for you that I can express my opinion here. Because it is obvious that your skin is so thin that you can NOT handle the expression of my opinion. Quite, frankly, that means that you are not in Tina’s league, ’cause she can handle it. Thanks for playin’…

ladyingray on March 17, 2012 at 3:24 PM

It seems to me you are probably violating the posting rules by insulting Tina’s intelligence. You are not just disagreeing, you are insulting the woman. The funny thing is you are one of lynch mobbist types on here always trying to get people banned. And the reality is you are a jerk.

I think you are being smarmy, and defending your little cyberbuddy despite the obvious fact she was being a jerk. I’m not going to talk to you anymore, b/c I expect intellectual honesty. If you are going to defend somebody who is clearly in the wrong while trying to demonize me when I’m in the right, you don’t deserve my respect.

Dr. Tesla on March 17, 2012 at 3:23 PM

No, actually, I was just trying to help you see that you are violating TOS and to get you to stop before you do get banned for it.

I don’t know Ladyingray, but I know she doesn’t need me to defend her. She’s been a HotAir participant for a very long time, and is quite capable of defending herself.

Well I think my mechanical engineering degree tends to indicate I’m bright. If you want to argue engineers are stupid, go for it. I think that’s a tough sell to most people, and your screenname is “lovingmyUSA”.

No, actually, I was just trying to help you see that you are violating TOS and to get you to stop before you do get banned for it.

I don’t know Ladyingray, but I know she doesn’t need me to defend her. She’s been a HotAir participant for a very long time, and is quite capable of defending herself.

Guess you’re on your own pal. Can’t say I didn’t try.

Dee2008 on March 17, 2012 at 3:33 PM

Ok, you are a flaming hypocrite. You have no little lectures for ladyingray who I think was off topic when she decided to insult Tina’s intelligence. If you want to believe I will get banned for simply criticizing ladyingray’s jerk behavoir because you consider it “off topic”, you are living in a fantasy world. If anybody deserves to be banned here, it’s ladyingrey. I'[m not saying they should or shouldnt do that, but it’s amazing you are holding me to a higher standard than the woman being kind of a witch to Tina. I don’t think it’s relevant how long she’s been posting at Hotair.